"The market seems to be on autopilot," said Joe Saluzzi, co-manager of trading at Themis Trading. "Everyone believes there are some serious issues being overlooked, but no one wants to fight a momentum-fueled rally…Plus, we've been on very light volume; when you see rallies, you want to see buyers."

"Forget [S&P] 1,660, 1,700, etc.. You should be concerned about protecting big gains," wrote Elliot Spar, market strategist at Stifel Nicolaus. "With new money, be selective and patient...This is not the 1st quarter anymore. You'll have to work harder to get on base and then stay close to the bag."

Retailers were among the day's strongest performers. L Brands (formerly Limited Brands) and Ross Stores rallied after both firms posted higher-than-expected same-store sales in March. Meanwhile, top retailers Costco and TJX reported weaker-than-expected sales, but still traded higher along with the broader market.

JCPenney jumped after three more top executives at the retailer parted ways with the company, according to a New York Post report, following the ouster of Chief Executive Ron Johnson.

On the economic front, weekly jobless claims declined 42,000 to a seasonally adjusted 346,000, according to the Labor Department, after a huge jump in the prior week. Economists polled by Reuters had expected a reading of 365,000.

Import prices fell in March as weak petroleum costs offset a spike in food prices, according to the Labor Department, matching expectations. The tame inflation environment should allow the Federal Reserve to stay on its ultra-easy monetary policy course as it tries to nurse the economy back to health.

On Wednesday, minutes from the Fed's March meeting released suggested some policymakers expect to slow the pace of asset purchases by mid-year and end them later this year. Under its current quantitative easing program, the Fed purchases $85 billion in Treasurys and mortgage-backed securities each month.

Still, the market rally continued despite concerns about when the central bank might start to pull back its stimulus efforts amid the healing U.S. economy.